Shares of Activision gained nearly 5 percent after the news. They were last seen trading slightly below that level, but were still 3 percent higher from their closing price.

Analysts had expected the company to give conservative guidance.

On Thursday, Activision said it expects adjusted full-year earnings of $2.50 a share on net bookings of $7.45 billion. Prior to the earnings release, Wall Street had forecast fiscal 2018 earnings of $2.57 a share on $7.41 billion in revenue, according to Thomson Reuters consensus estimates.

Here is what each of the company"s businesses reported in revenue for the quarter compared with what Wall Street expected, according to Street Account consensus estimates:

Activision: $1.34 billion vs. $1.40 billion expected

Blizzard: $599 million vs. $526.1 million expected

King: $516 million vs. $508.2 million expected

King, the maker of "Candy Crush," saw year-over-year growth in revenue, beating analyst expectations. The segment reported $516 million in net revenue, more than the $508.2 million expected by analysts according to Street Account.

Analysts had expected a solid quarter led by the successful launch of Activision"s "Call of Duty: WWII." The video game debuted in early November and surpassed $1 billion in sales after about six weeks, according to the company. The title went on to become the top grossing console game of the year globally, the company said Thursday.

"We believe a strong Q4 is largely baked into investor expectations at this point, so post-earnings stock action could hinge on the initial outlook for 2018," Piper Jaffray analysts Michael J. Olson and Yung Kim wrote in a note to investors in January.

Meanwhile, the video game giant behind "World of Warcraft" is making a big bet on esports, kicking off the inaugural season of its Overwatch League last month. That holds the promise of new revenue streams.

"All of the commercial opportunities that exist in professional sports are opportunities that are available to us also," CEO Bobby Kotick told CNBC in January. "Plus you have virtual items. You have over-the-top advertising opportunities that wouldn"t exist in traditional sports."

As of its Thursday close, Activision Blizzard"s stock is up about 68 percent over the last 12 months, compared with the S&P 500"s 12 percent return.

— CNBC"s Michelle Fox contributed to this report.

Correction: This story has been updated to reflect that Activision Blizzard expects earnings of $2.50 a share on $7.45 billion in revenue for fiscal 2018. A previous version of this story misstated those figures.